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Determine the net profit after tax for each year

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Reference no: EM133024944

Question - Management of Red Hot Choice Ltd is considering the following investment project:

Capital Outlay $100,000

Net Profit p.a.(before Depreciation and Tax) $50,000

Depreciation p.a. $20,000

Economic Life 5 years

Salvage Value $nil

Tax Rate payable (paid in year of income) 30%

Required Rate of Return 6%

Required - Determine the Net Profit After Tax for each year?

a. $30,000

b. $40,000

c. $21,000

d. $35,000

Reference no: EM133024944

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